Home-purchase timeline | Can you make an offer? | Under contract insights | Pending insights | Making a backup offer | Backup offer pros and cons | Your backup offer's chances | Frequently asked questions
Pending and under contract both signal that a buyer's offer on a house or property has been accepted by the seller.
The most relevant difference between pending and under contract for a house hunter is one of degree: a house that's pending is further along the home-purchase timeline than one that's under contract.
Neither pending nor under contract means a deal's locked up. You may still have a chance to buy a house with either status — but the odds are more in your favor if the house is under contract vs. pending.
A look at the home-purchase timeline helps explain why.
A brief explanation of the home-purchase timeline
Here's a simplified timeline of important milestones in the home-purchase process, with a focus on the pending and under contract stages.
Milestone: Under contract
Once an offer on a house or property has been accepted by the seller, its status changes to under contract.
» READ: What Does Under Contract Mean?
During the under contract phase, the buyer and seller work to resolve the issues they've agreed to and included in the contract.
Some issues are relatively straightforward, like meeting a timeline or paying earnest money costs — a buyer's good-faith deposit that demonstrates their seriousness.
The biggest hurdles during the under contract phase are contingencies. These are conditions that must be met before a contract is considered legally binding. Major contingencies buyers typically include in home-purchase contracts revolve around financing, inspections, and appraisal.
Contingencies are often responsible for deals falling apart. For instance, if a buyer can't secure a mortgage, the contract terminates.
The most common contingency? Home inspection. It appears in 59% of home-purchase contracts, according to the May 2020 Realtors Confidence Index Survey.
When the parties clear all the contingencies included in the contract, the status of the house becomes pending.
Deals in the pending stage are less likely to fall apart than those in the under contract phase. Those pesky contingencies that can cause a deal to die are in the rear view window, but the deal can still fall apart.
When all of the issues surrounding the pending phase are cleared, the deal goes to closing. The buyer pays closing costs. Keys are handed over. Someone's got themselves a new house.
You can (often) make an offer on a house that's pending or under contract
Most of the time you can make an offer on a house that's pending or under contract, but not always. And when you make an offer, you’ll need to overcome significant obstacles to eventually secure the house.
Here's a deeper look through the lenses of pending vs. under contract:
Under contract: What a buyer should know
When a house is under contract, the seller and the initial buyer have agreed to timelines and settled on a price. A contract has been signed. But it's still near the start of a process that can extend for weeks, or even months.
The buyer and seller need to address the points they've agreed to in the contract. Because the process involves potential pitfalls, the seller of a house that's under contract typically accepts other offers.
In some places, you'll see the designation "active under contract," which publicly signals that the seller's still actively taking offers. Otherwise, your agent can talk to the seller's agent to determine the seller's position on accepting more offers.
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Pending: What a buyer should know
Because the current buyer and seller are deeper into the process than they are when their deal goes under contract, pending presents a more narrow path to success for a potential buyer.
Sometimes, a property listing will feature a more detailed "pending — taking backups" designation, so you'll know the seller's open to an offer.
If you don't see such a designation, your agent can reach out to the seller's agent to find out where things stand with the initial buyer's offer and if the seller's accepting other offers.
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How to make an offer on a house that's pending or under contract
It's the same process for either status: You make a backup offer.
A backup offer means a seller proactively takes secondary offers since the first offer could fall apart. The process usually follows the same trajectory as the primary offer, but becomes viable only if the initial offer terminates.
The pros and cons of a backup offer
Again, a good agent can find out more information about why the seller's taking backup offers and can help determine whether your backup offer might stand a chance.
Buying a house that's pending or under contract: Straight talk about the odds
The odds of buying a house that's either pending or under contract are long. Six percent of overall contracts were terminated in November 2020, according to that month's Realtors Confidence Index Survey.
The main reasons the contracts within that 6% fell through:
What might happen: A buyer opts out because the appraisal for the property comes in below the price settled on by the two parties.
What might happen: A buyer can't close on a loan for a home mortgage and has no money to buy the property.
Home Inspection Issues
What might happen: An inspection of the property unearths a significant problem, like a major structural or mold issue.
What might happen: A lien — a legal claim against the current owners of a property — turns up in a title search, which could leave the new owner with the responsibility for the debts.
What might happen: The buyer gets laid off and no longer has income.
These potential pitfalls in the home-purchase process are reasons for hope if you're looking to buy a house that's under contract or pending. You still have an opportunity, even if it's not an easy path.
A rock star agent at your side can help you figure out how to best position you to secure a home you love that's pending or under contract.
Frequently asked questions
What does pending mean?
Pending means a buyer has made an offer on a property and signed a home-purchase contract and that contingencies have been resolved by the buyer and seller.
You can make an offer on a pending house.
» READ MORE: What Does Pending Mean in Real Estate?
What does contingent mean?
A contingency is a "condition that must be met before a contract is legally binding," according to the Federal Trade Commission.
Contingencies are included in most home-purchase contracts and usually address financing, inspection, and appraisal concerns.
» READ MORE: What Does Contingent Mean in Real Estate?